Italian insurer Generali, one of four investors in Telco, the holding company that controls 22.39% of Telecom Italia (TI), has confirmed that it has exercised the right to withdraw its 19.32% stake in the joint venture. Generali’s decision to exit the agreement, originally due to expire on 28 February 2015, is expected to prompt fellow shareholders Mediobanca and Intesa Sanpaolo to offload their own respective stakes in Telco, potentially leaving main backer Telefonica as the last investor standing.
Under the terms of the agreement, the trio have the option to either buy Generali’s stake in Telco or agree to dissolve the holding company and keep or sell their direct stakes in TI. However, both Mediobanca and Intesa Sanpaolo have previously gone on record saying that they plan to exit Telco, suggesting the dissolution of the holding company is the most likely outcome. If all goes to plan, when the dust settles, Telefonica will end up with a direct stake of around 14.77% in TI.
Currently, Telefonica holds a 66.00% stake in Telco, alongside Italian banks Intesa Sanpaolo and Mediobanca (7.34% each) and Generali (19.32%). The Telco partners paid Pirelli EUR4.16 billion (USD5.95 billion) in 2007 for the indirect interest in TI and went on to combine this stake with their existing investments.